Financial Statement 1

Financial Statement Analysis

YOUR NAME

Axia College of University of Phoenix

Financial Statement 2

Financial statements are often t he life line of a company. These statements

show a company manager how viable the organization is and how profitable it has

been. If this financial statement is not interpreted right it could cause the reader to

make some serious mistakes when making the firm’s financial decisions. Financial

statements provide an overview of the businesses financial conditions. There are

four basic types of financial statements. The first is the balance sheet which reports

a company’s assets, liabilities and net equity for a certain period. An income

statement also known as profit and loss statement reports the company’s income,

expenses and profits. The retained earning statement explains the changes in a

companies retained earnings over a period. A cash flow statement shows the

companies cash flow activities. These figures come from the companies operating,

investing and financial activities. To sum things up these statements shows a

company where there money has gone and profitable they have been. They shown

an overall risk-return profile and if the mix of debt and equity financing is

profitable. Lenders such as banks or bond buyers are interested in financial

statements because through them they can determine if their interest and principles

Financial Statement 3

can be paid on time. Equity owners want the assurance that, after paying their

lenders, their will be finds left over to reinvest in their company for growth or

paying out of dividends. Good management through financial statements can lead to

a variety of ratio values.

There are limitations in what kind of information one can obtain from

financial statements. These statements will